U.S. stock market regulator, the Securities and Exchange Commission (SEC), has slapped a staggering $190 million fine on Computer Science Corp for inflating financial results and hiding loss relating to a contract with Britain’s National Health Service.

The SEC has also brought civil charges against eight former executives of the IT outsourcing firm, based in Falls Church, Virginia.

The case originates in a contract CSC struck with the British government agency (NHS) nearly a decade ago. Soon after signing this contract, CSC realized it could not meet the deadline and, therefore, would lose money.

To avoid a hit to its earnings, the IT firm slightly tweaked its accounting model, which artificially increased its profits but “had no basis in reality,” the SEC said.

“In reality, NHS officials repeatedly rejected CSC’s requests that the NHS pay the company higher prices for less work. By basing its models on the flailing proposals, CSC artificially avoided recording significant reductions in its earnings in 2010 and 2011,” said the regulator.

CSC former finance executives Robert Sutcliffe, Edward Parker, and Chris Edwards are reportedly contesting the charges in a federal court in Manhattan. Sutcliffe was CSC’s finance director for the multi-billion dollar contract.

But former CEO Michael Laphen, according to SEC statement, agreed to return to CSC more than $3.7 million in compensation and pay a $750,000 penalty, while former CFO Michael Mancuso agreed to return $369,100 in compensation and pay a $175,000 penalty.

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Mancuso allegedly concealed from investors a prepayment arrangement that allowed CSC to meet its cash flow targets by effectively borrowing large sums of money from the NHS at a high interest rate. Mancuso merely told investors that CSC was hitting its targets “the old fashioned hard way.”

“CSC repeatedly based its financial results and disclosures on the NHS contract it was negotiating rather than the one it actually had, and misled investors about the true status of the contract. The significant sanctions in this case against the company, CEO, and CFO reflect our focus on ensuring that such misconduct is vigorously pursued and punished,” said Andrew J. Ceresney, Director of the SEC’s Division of Enforcement.

The CSC and finance executives in Australia and Denmark also manipulated the financial results for businesses in those regions, the SEC said.

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News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.